<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THIOKOL CORPORATION
--------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
<PAGE>
[LOGO OF THIOKOL CORPORATION APPEARS HERE]
SEPTEMBER 22, 1995
Dear Stockholder:
We invite you to the Annual Meeting of Stockholders of Thiokol Corporation,
which will be held on Thursday, October 26, 1995, at the Corporate Office of
Thiokol Corporation, 2475 Washington Blvd., Ogden, Utah, commencing at 10:00
a.m. local time. Information about the matters to be voted upon at the meeting
is in the enclosed formal Notice of Meeting and Proxy Statement.
It is important that your shares be represented at this meeting whether or
not you personally plan to attend. Please sign, date and return your proxy
promptly in the enclosed envelope. This will not limit your right to vote in
person or attend the meeting.
The Company's Annual Report for the fiscal year ended June 30, 1995, is being
distributed to stockholders along with this proxy statement.
[SIGNATURE OF JAMES R. WILSON [SIGNATURE OF U. EDWIN GARRISON
APPEARS HERE] APPEARS HERE]
James R. Wilson U. Edwin Garrison
President and Chairman of the Board
Chief Executive Officer
<PAGE>
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
THURSDAY, OCTOBER 26, 1995
To the Stockholders:
The Annual Meeting of Stockholders of Thiokol Corporation (the "Company")
will be held on Thursday, October 26, 1995, at the Corporate Office of Thiokol
Corporation, 2475 Washington Blvd., Ogden, Utah, at 10:00 a.m. local time, to
consider and vote upon:
1. Election of three directors (see page 2);
2. Ratification of appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending June 30, 1996 (see page
21); and
3. Any other business that may properly come before the meeting.
The close of business on August 22, 1995, has been fixed as the record date
for the meeting. All stockholders of record on that date are entitled to be
present and vote at the meeting.
Attendance at the Annual Meeting will be limited to stockholders of record,
beneficial owners of Company common stock entitled to vote at the meeting
having evidence of ownership, the authorized representative (one only) of an
absent stockholder, and invited guests of management. Any person claiming to be
an authorized representative of a stockholder must, upon request, produce
written evidence of such authorization.
The meeting will be conducted pursuant to the Company's By-Laws and rules of
order prescribed by the chairman of the meeting.
September 22, 1995
By Order of the Board of Directors,
Edwin M. North
Secretary
<PAGE>
THIOKOL CORPORATION
2475 WASHINGTON BOULEVARD
OGDEN, UTAH 84401-2398
PROXY STATEMENT
September 22, 1995
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Company's Board of Directors of proxies for use at its Annual Meeting of
Stockholders to be held on Thursday, October 26, 1995, and at any adjournment
thereof (the "1995 Annual Meeting").
Shares represented in person or by properly executed and unrevoked proxies
received in proper form in time for the 1995 Annual Meeting will be voted.
Shares will be voted in accordance with stockholders' instructions in the
accompanying proxy. If any such proxy contains no instructions, the shares will
be voted in accordance with the directors' recommendations, which are noted
herein. Any proxy given may be revoked at any time before it is voted at the
meeting.
On August 22, 1995, the record date for the 1995 Annual Meeting, there were
18,255,344 shares of $1.00 par value common stock outstanding, each entitled to
one vote, and there is no cumulative voting. The Company has no other class of
equity securities outstanding.
Pursuant to the By-Laws of the Company, three Judges of Election have been
elected by the Board of Directors to serve at the 1995 Annual Meeting. In the
event any judge so elected shall not be present at the meeting, that judge
shall be replaced with a judge by the Board of Directors in advance of the
meeting or by the chairman of the meeting in advance of any voting at such
meeting. The owners of a majority of the outstanding shares entitled to vote
are required for a quorum for the transaction of business at the 1995 Annual
Meeting. Under Delaware corporation law abstentions, withheld votes and broker
no-votes (i.e., shares held by a broker or nominee which are represented at the
meeting, but with respect to which such broker or nominee is not empowered to
vote on a particular proposal or proposals) will be considered part of the
quorum. Directors will be elected by a plurality of the votes cast at the 1995
Annual Meeting, which means that abstentions, withheld votes and broker no-
votes will not affect the election of the candidates. All other proposals,
including the ratification of the appointment of Ernst & Young LLP as the
Company's independent auditors, require the favorable vote of the holders of a
majority of the shares present and entitled to vote at the 1995 Annual Meeting
to pass. Therefore, abstentions as to particular proposals will have the same
effect as votes against such proposals and broker no-votes will not be counted
as votes for or against the proposal, and will not be included in counting the
number of votes necessary for approval of the proposal. The polls for the
casting of ballots at the 1995 Annual Meeting shall open at 8:00 a.m. local
time and shall close at 10:00 a.m. on October 26, 1995. For a ten day period
prior to the date of the 1995 Annual Meeting, a list of stockholders entitled
to vote is open for examination during normal business hours at the Company's
principal offices, 2475 Washington Blvd., Ogden, Utah and may be examined by
any stockholder for any purpose germane to the meeting.
1
<PAGE>
The Company will bear the cost of the solicitation. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of the Company's common stock of whom they have knowledge, and will
reimburse them for their expenses in so doing. Certain directors, officers and
other employees of the Company, not specifically employed for the purpose, may
solicit proxies, without additional remuneration therefor, by personal
interview, mail, telephone or telegraph. In addition, the Company has retained
D. F. King & Co., Inc. to assist in the solicitation for a fee of $5,000 plus
expenses.
1. ELECTION OF DIRECTORS
The Board of Directors is currently comprised of ten directors. James R.
Burnett will not stand for re-election due to his retirement. By resolution, in
accordance with the By-Laws of the Company, the Board of Directors will reduce
the Board membership from ten directors to nine directors effective October 26,
1995. The Company's Restated Certificate of Incorporation and By-Laws provide
for the Board to be divided into three classes. Each class serves for a term of
three years. At the 1995 Annual Meeting, Edsel D. Dunford, U. Edwin Garrison
and James R. Wilson will stand for election as nominees for directors for a
term to expire at the 1998 Annual Meeting.
The following table shows the class in which each nominee for director and
each director continuing in office serves and the year in which the term of
office for each such class expires.
BOARD OF DIRECTORS
YEAR TERM OF OFFICE EXPIRES
AT THE OCTOBER ANNUAL MEETING
<TABLE>
<CAPTION>
1995 1996 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NOMINEES FOR DIRECTOR
U. Edwin Garrision(/1/) ) -------------------------------------
James R. Wilson(/1/) ))
Edsel D. Dunford(/2/) ) -------------------------------------
DIRECTORS CONTINUING IN OFFICE
Michael P.C. Carns(/2/) ) -------------------------
L. Dennis Kozlowski(/3/) ))
James M. Ringler(/3/) ) -------------------------
Neil A. Armstrong(/4/) ) -------------
Charles S. Locke(/4/) ))
Donald C. Trauscht(/4/) ) -------------
</TABLE>
--------
(/1/) U. Edwin Garrison was elected by stockholders at the 1992 Annual Meeting
to a term expiring at the 1995 Annual Meeting. James R. Wilson was
elected a director by the Board to a term expiring at the 1995 Annual
Meeting.
(/2/) By resolution, in accordance with the By-Laws of the Company, the Board of
Directors expanded the Board from eight to ten directors, the vacancies
created thereby were filled by Michael P.C. Carns and Edsel D. Dunford for
a term to expire at the 1997 and 1995 Annual Meetings respectively.
(/3/) L. Dennis Kozlowski and James M. Ringler were elected by stockholders at
the 1994 Annual Meeting to terms expiring at the 1997 Annual Meeting.
(/4/) Neil A. Armstrong, Charles S. Locke, and Donald C. Trauscht were elected
by stockholders at the 1993 Annual Meeting to terms expiring at the 1996
Annual Meeting.
2
<PAGE>
The nominees for election as directors at the 1995 Annual Meeting for the
above described terms are listed on the following pages. If any nominee should
become unavailable, an event the Board of Directors does not anticipate, it is
intended that such shares will be voted for such substitute nominee as may be
selected by the Board of Directors, or the Board may reduce the number of
directors. All nominees are presently serving as directors and have consented
to being named herein and to serve if elected.
BOARD MEETING ATTENDANCE AND COMPENSATION OF DIRECTORS
The Company's Board of Directors met six times during fiscal year 1995. All
incumbent directors were present for 75 percent or more of the total meetings
of the Board while they were Board members.
Directors who are employees of the Company receive no compensation for their
service as directors. Mr. James R. Wilson is the only employee serving as a
director. Other directors are paid an annual retainer of $30,000 plus a fee of
$1,000 and travel expenses for each Board meeting attended.
The Company maintains a Deferred Fees Plan where non-employee directors may
elect to have payment of part or all of their directors' compensation deferred
until such time as they cease to be a director. The Plan was amended by the
Board to permit directors, beginning January 1, 1996, the option of electing
the deferral of their directors' fees into a cash or phantom stock credit
account. Amounts credited to the cash account are credited with increments
(similar to interest), amounts credited to the phantom stock account are
credited with amounts reflecting the change in the price of the Company's
common stock and payment of dividends. All distributions of a director's cash
or phantom stock account are made only in cash. James M. Ringler participates
in the Plan. Two retired directors with an interest in the Plan are receiving
benefits.
Effective July 1, 1995, the Company renewed a one year consulting agreement
with U. Edwin Garrison, Chairman of the Board, the retired Chief Executive
Officer of the Company, pursuant to which he provides advice to the President
and Chief Executive Officer and also acts as an advisor to Chairmen of the
Committees of the Board of Directors. During fiscal year 1995, Mr. Garrison
received payments of $150,000. Effective July 1, 1995, the annual retainer was
reduced to $50,000 payable quarterly over the term of the agreement. In
addition, Mr. Garrison receives the director's fees paid to non-officer
directors.
Mr. Garrison, as a retired employee of the Company, participates in the
Pension Plan and Excess Plan and receives the benefits described on page 12.
3
<PAGE>
NOMINEES FOR DIRECTORS
THREE-YEAR TERMS EXPIRING AT THE 1998 ANNUAL MEETING
[PHOTO OF EDSEL D. DUNFORD, age 60, was elected a director of the
EDSEL D. Company in January 1995. He served as President and Chief
DUNFORD Operating Officer of TRW Inc. from 1991 until his retirement in
APPEARS December of 1994. He served as Executive Vice President and
HERE] General Manager of TRW Space and Defense Business from 1987 to
1991. Mr. Dunford is a director of Cooper Tire & Rubber Company
and is a trustee at the University of California, Los Angeles.
Mr. Dunford holds a Bachelor of Science from the University of
Washington and a Masters of Engineering degree from the
University of California at Los Angeles.
[PHOTO OF U. EDWIN GARRISON, age 67, Chairman of the Board, retired as
U. EDWIN Chief Executive Officer of the Company in June 1993 with 39
GARRISON years of service. He served as Chairman of the Board and Chief
APPEARS Executive Officer from July 1992 to June 1993; Chairman of the
HERE] Board, President and Chief Executive Officer from July 1991 to
July 1992; and as President and Chief Executive Officer from
July 1989 to June 1991. He has served as director of the Company
since July 1989. Mr. Garrison is a director of Questar
Corporation and First Security Corporation. He holds a Bachelor
of Science degree in Mechanical Engineering from Mississippi
State University.
[PHOTO OF JAMES R. WILSON, age 54, has served as President and Chief
JAMES R. Executive Officer and a director of the Company since October
WILSON 1993. He joined the Company in 1989 as Vice President and Chief
APPEARS Financial Officer and became Executive Vice President and Chief
HERE] Financial Officer in 1992. Prior to joining the Company he was
Senior Vice President and Chief Financial Officer of Circuit
City Stores 1987-1988. Mr. Wilson is a director of Rohr, Inc.,
advisory director of The First Security Bank of Northern Utah
and member of the Board of Trustees of the College of Wooster
and serves as Finance Chairman. He holds a Bachelors degree from
the College of Wooster and a Masters of Business Administration
from Harvard University.
THREE-YEAR TERMS EXPIRING AT THE 1997 ANNUAL MEETING
[PHOTO OF MICHAEL P.C. CARNS, age 58, was elected a director of the
MICHAEL Company in January 1995. General Carns retired as Vice Chief of
P.C. CARNS Staff of the United States Air Force in 1994 with 36 years of
APPEARS distinguished military service. General Carns holds a Bachelor
HERE] of Science degree from the United States Air Force Academy and a
Masters of Business Administration degree from Harvard
University.
4
<PAGE>
[PHOTO OF L. DENNIS KOZLOWSKI, age 48, was elected a director of the
L. DENNIS Company in August 1993. He has served as Chairman of the Board,
KOZLOWSKI President and Chief Executive Officer of Tyco International
APPEARS Ltd., a manufacturer of fire protection and flow control
HERE] products, since 1992, as President since 1989, and President of
Grinnell Corporation, a subsidiary, since 1982. He is a director
of Applied Power, Dynatech Corp. and Raytheon Co. Mr. Kozlowski
holds a Bachelor of Science and a Master of Business
Administration degrees from Seton Hall University.
[PHOTO OF JAMES M. RINGLER, age 50, was elected a director of the
JAMES M. Company in August 1993. He has served as the President and Chief
RINGLER Operating Officer since 1992 of Premark International, Inc., a
APPEARS diversified manufacturer of premium brand name products such as
HERE] Tupperware, West Bend, Wilsonart, Hobart, Vulcan, Hartco, Precor
and Florida Tile; President of its Food Equipment Group from
1990 to 1992; and as President of the Major Appliance Group of
White Consolidated Industries from 1986 to 1990. He is a
director of Premark International, Inc. and Reynolds Metals
Company. Mr. Ringler holds a Bachelor of Science and Master of
Business Administration degrees from the State University of New
York at Buffalo.
TERMS EXPIRING AT THE 1996 ANNUAL MEETING
[PHOTO OF NEIL A. ARMSTRONG, age 65, became a director of the Company in
NEIL A. October of 1989. He has served as Chairman of AIL Systems, Inc.,
ARMSTRONG subsidiary of Eaton Corporation, an electronics and systems
APPEARS company with sales primarily to the Federal Government. He is a
HERE] director of CINergy, Inc., Cincinnati Milacron Inc., Eaton
Corporation, RMI Titanium Co., and USX Corporation. He holds a
Bachelor of Science degree in Aeronautical Engineering from
Purdue University and a Master of Science degree in Aerospace
Engineering from the University of Southern California.
[PHOTO OF CHARLES S. LOCKE, age 66, is the retired Chairman of the Board
CHARLES S. and Chief Executive Officer of Morton International, Inc., a
LOCKE manufacturer and marketer of specialty chemicals, automotive
APPEARS inflatable restraint systems and salt. He served as Chairman of
HERE] the Board and Chief Executive Officer of the Company from 1980
to 1989. Since then, he has continued as a non-employee director
of the Company. He is a director of Avon Products, Inc.; NICOR,
Inc. and its subsidiary, Northern Illinois Gas Company; and
Whitman Corporation. Mr. Locke holds Bachelor of Business
Administration and Master of Science degrees from the University
of Mississippi.
[PHOTO OF DONALD C. TRAUSCHT, age 61, was elected a director of the
DONALD C. Company in August 1993 and serves as Chairman of the Board and
TRAUSCHT Chief Executive Officer of Borg-Warner Security Corporation, a
APPEARS supplier of security services. He served as the Chairman of the
HERE] Board, President and Chief Executive Officer of Borg-Warner
Security Corporation 1993 to 1995; Chairman and President, Borg-
Warner Corporation, 1990 to 1992, and as Vice President Finance
and Strategic, 1987 to 1990. He is a director of Borg-Warner
Automotive, Inc., Baker Hughes Incorporated, Blue Bird
Corporation, Imo Industries, Inc., and ESCO Electronics
Corporation. Mr. Trauscht holds a Bachelor of Science degree
from St. Mary's College and a Master of Business Administration
degree from the University of Chicago.
5
<PAGE>
COMMITTEES OF THE BOARD
There are four standing committees of the Company's Board of Directors: Audit
Committee, Compensation Committee, Nominating Committee, and Executive
Committee.
The Audit Committee recommends to the Board the independent auditors to be
selected to audit the Company's annual financial statements, and reviews the
fees charged for such audits and for any special assignments given the
auditors. The Committee reviews the annual audit and its scope, including the
independent auditors' comment letter and management's responses; possible
violations of the Company's business ethics and conflict of interest policies;
any major accounting changes made or contemplated; and the effectiveness and
efficiency of the Company's internal audit program. In addition, the Committee
confirms that no restrictions have been imposed by Company personnel on the
scope of the independent auditors' and the internal auditors' examinations.
Members of this Committee are Messrs. Donald C. Trauscht (Chairman), Michael
P.C. Carns, Neil A. Armstrong, James R. Burnett, and L. Dennis Kozlowski. The
Committee met four times in fiscal year 1995. All Committee members attended 75
percent or more of the Committee meetings while a member of the Committee.
The Compensation Committee annually reviews and reports to the Board on the
investment performance of the fund managers of the Company's retirement plans
and makes recommendations to the Board with respect to the creation and
amendment of compensation, retirement and other benefit plans of the Company
and its subsidiaries. The Committee also approves compensation actions for
Executive Officers and other key employees, administers the Company's executive
bonus programs, and administers the Company's stock option and awards plans.
Members of the Committee are Messrs. Charles S. Locke (Chairman), James R.
Burnett, James M. Ringler, and L. Dennis Kozlowski. The Committee met three
times and took action by written unanimous consent two times in fiscal year
1995. All incumbent members attended 75 percent or more of the Committee
meetings while a member of the Committee. The Committee's report on Executive
Compensation is set forth below.
The Nominating Committee reviews the size and composition of the Board,
evaluates individuals for potential membership on the Board, makes
recommendations to the Board of individuals to fill vacancies or new positions,
makes recommendations to the Board of individuals to be proposed to
shareholders for election to the Board at annual meetings of stockholders and
makes recommendations to the Board regarding Committee structures and
responsibilities. Members of the Committee are Messrs. James R. Burnett
(Chairman), Edsel D. Dunford, Charles S. Locke, U. Edwin Garrison and James M.
Ringler. The Committee had two meetings in fiscal year 1995. All Committee
members attended 75 percent or more of the Committee meetings while a member of
the Committee.
The Executive Committee may exercise all of the powers and authority of the
Company's Board, except that the Committee does not have the power to amend the
Company's By-Laws or Certificate of Incorporation (except to fix the
designations, preferences and other terms of any of its preferred stock),
authorize the issuance of stock, declare dividends, adopt an agreement of
merger or consolidation, adopt a certificate of ownership and merger under
Delaware law, or recommend to Company stockholders the sale, lease or exchange
of all or substantially all of its property and assets, a dissolution of the
Company or a revocation of a dissolution. Members of this Committee are Messrs.
U. Edwin Garrison (Chairman), Charles S. Locke, and James R. Wilson. The
Committee had no meetings in fiscal year 1995.
6
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of August 22, 1995, with
respect to the shares of the Company's common stock which are held by persons
known to the Company to be beneficial owners of more than five percent of the
such stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF NATURE PERCENT
OF BENEFICIAL OWNERS OF BENEFICIAL OWNERSHIP(/1/) OF CLASS
-------------------- ---------------------------- --------
<S> <C> <C>
FMR Corp. ...................... Aggregate Amount: 1,317,100 7.2%
82 Devonshire Street Sole Voting Power: 130,500(/2/)
Boston, Massachusetts 02109 Sole Dispositive Power: 1,317,100 7.2
GSB Investment Management
Company........................ Aggregate Amount: 1,749,955 9.6%
301 Commerce Sole Voting Power: 847,435 4.6
Suite 1501 Sole Dispositive Power: 1,653,105 9.0
Ft. Worth, Texas 76102 Shared Dispositive Power: 96,850(/2/)
N.M. Capital Management, Inc. .. Aggregate Amount: 958,307 5.2%
6501 Americas Parkway Sole Voting Power: 455,951 2.4
Albuquerque, New Mexico 87110
Scudder, Stevens & Clark, Inc... Aggregate Amount: 1,208,200 6.6%
Two International Place Sole Voting Power: 703,100 3.8
Boston, Massachusetts 02110 Shared Voting Power: 183,800(/2/)
Sole Dispositive Power: 1,208,200 6.6
The Prudential Insurance Company
of America..................... Aggregate Amount: 1,441,330 7.9%
751 Broad Street Sole Voting Power: 7,600(/2/)
Newark, New Jersey 07102 Shared Voting Power: 1,433,730 7.8
Sole Dispositive Power: 7,600(/2/)
Shared Dispositive Power: 1,433,730 7.8
</TABLE>
--------
(/1/) As reported on Schedule 13G or provided by the stockholder.
(/2/) Less than 1%.
7
<PAGE>
The following table shows the Company's common stock beneficially owned as of
August 22, 1995, by each director and nominee for director and each of the
Executive Officers named in the table on page 9, and the aggregate number of
such shares beneficially owned by all directors and Executive Officers of the
Company as a group (as used in this Proxy Statement the term "Executive
Officer" means all officers of the Company designated as Executive Officers by
the Board of Directors). Unless otherwise indicated in the footnotes, each
named person and member of the group has sole voting and investment power with
respect to the shares shown.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OWNED(/1/)
---- ------------
<S> <C>
Neil A. Armstrong............................................... 1,100(/2/)
James R. Burnett................................................ 1,000
Michael P.C. Carns.............................................. 200
Richard L. Corbin............................................... 18,000
Edsel D. Dunford................................................ 1,000
H. George Faulkner.............................................. 22,365
U. Edwin Garrison............................................... 91,772
L. Dennis Kozlowski............................................. 1,000
Joseph A. Lombardo.............................................. 49,035
Charles S. Locke................................................ 2,562
James E. McNulty................................................ 43,363
James M. Ringler................................................ 0
Donald C. Trauscht.............................................. 400
James R. Wilson................................................. 89,622
All directors, nominees and Executive Officers as a group
(21 persons, including those named)............................ 421,664
</TABLE>
--------
(/1/) Including shares which may be acquired presently or within 60 days upon
exercise of stock options: Messrs. Corbin 17,000; Faulkner 17,500;
Garrison 54,000; Lombardo 48,100; McNulty 40,500; Wilson 85,650; and all
directors, nominees and Executive Officers as a group 346,689 shares.
(/2/) Owned by a pension trust in which Mr. Armstrong has sole voting and
investment powers.
No individual's beneficial holdings total more than one percent of the
outstanding shares; the holdings of the group represent 2.3 percent of the
outstanding shares. Except for Form 4 filed late by Mr. Garrison, reporting two
transactions, and Mr. Ringler, reporting one transaction, to the Company's
knowledge based on review of copies of such reports furnished to the Company
and written representations, all Forms 3, 4 and 5 required by Section 16(a) of
the Securities Exchange Act of 1934 have been timely filed with respect to the
most recently concluded fiscal year.
8
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table sets forth the compensation for the three
fiscal years ended June 30, 1995, both long-term and short-term, for services
in all capacities earned by those individuals who were as of June 30, 1995, (i)
the Chief Executive Officer; and (ii) the other four most highly compensated
Executive Officers of the Company and subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------- -----------------------
AWARDS PAYOUTS
---------- ------------
SECURITIES
UNDERLYING
NAME AND OTHER ANNUAL OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(/1/) COMPENSATION(/2/) SARS# PAYOUTS(/3/) COMPENSATION(/4/)
------------------------ ---- -------- ---------- ----------------- ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Wilson......... 1995 $425,000 $467,500 $ 0 30,000 $266,030 $4,458
President and Chief 1994 320,750 347,000 0 40,000 133,936 6,336
Executive Officer 1993 230,250 193,410 243,205 0 272,255 5,810
Richard L. Corbin(/5/).. 1995 210,000 189,000 0 5,000 0 6,300
Senior Vice President 1994 26,250 0 0 12,000 0 525
and Chief Financial 1993 -- -- -- -- -- --
Officer
Joseph A. Lombardo...... 1995 215,000 175,988 0 9,500 111,000 4,159
Vice President and 1994 185,000 166,514 0 10,000 0 4,740
General Manager, 1993 159,055 93,514 0 0 0 4,536
Space Operations
James E. McNulty........ 1995 191,900 153,520 0 7,500 167,061 4,686
Executive Vice 1994 178,375 142,760 126,140 10,000 84,471 4,746
President Human 1993 164,000 110,208 0 0 171,032 4,484
Resources and
Administration
H. George Faulkner...... 1995 230,454 112,312 0 9,500 0 5,077
Vice President, 1994 221,712 175,297 0 10,000 0 5,827
Fastening Systems; and 1993 216,300 59,180 0 0 0 3,529
President, Huck
International, Inc.
</TABLE>
--------
(/1/) Bonuses accrued under the Company's Key executive Bonus Plan are paid
after the fiscal year in which they are accrued.
(/2/) Amounts paid to Messrs. Wilson and McNulty represent Supplemental Cash
Payment pursuant to stock options granted prior to fiscal year 1992.
(/3/) The fiscal year 1995 LTIP payouts were made in August 1995 from the
Company's Key Executive Long-term Incentive Plan for the plan period July
1, 1992, through June 30, 1995. The fiscal year 1994 and fiscal year 1993
LTIP payouts were made with regard, respectively, to the three-year Plan
periods ending June 30, 1994 and June 30, 1993. Mr. Corbin participates in
the plan, but will not be eligible for plan benefits prior to completion
of the three-year plan period ending June 30, 1997. Beginning with the
1994 award, LTIP payments are made 50 percent in cash and 50 percent
Company common stock valued at market on the date of issuance. Messrs.
Wilson and McNulty received 1,573 and 982 shares of common stock
respectively in 1994; Messrs. Wilson, Lombardo, and McNulty received
2,399, 835 and 1,381 shares respectively in 1995.
(/4/) The amounts are the Company's matching contributions on behalf of each
named individual under the Company's Employee Savings and Investment Plan,
a 401(k) plan.
(/5/) Mr. Corbin was elected an Executive Officer in May 1994 when he joined the
Company.
9
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1995
The table below shows the Company's stock option grants in fiscal year 1995
to the named Executive Officers. The 1989 Stock Awards Plan, pursuant to which
these grants were made, authorizes the Compensation Committee to grant stock
options, stock appreciation rights, shares of restricted stock and other awards
valued by reference to the Company's common stock.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR OPTION
INDIVIDUAL GRANTS(/1/) TERM(/2/)
---------------------------------- -------------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS/SARS OR BASE
UNDERLYING GRANTED TO PRICE
OPTIONS/SARS EMPLOYEES IN PER EXPIRATION
NAME GRANTED (#) FISCAL YEAR SHARE DATE 0% 5% 10%
---- ------------ ------------ -------- ---------- --- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Wilson......... 30,000 17.5 $24.4375 8/18/2004 $ 0 $1,194,990 $1,898,700
Richard L. Corbin....... 5,000 2.9 24.4375 8/18/2004 0 199,165 316,450
Joseph A. Lombardo...... 9,500 5.5 24.4375 8/18/2004 0 378,413 601,255
James E. McNulty........ 7,500 4.3 24.4375 8/18/2004 0 298,747 474,675
H. George Faulkner...... 9,500 5.5 24.4375 8/18/2004 0 378,413 601,255
</TABLE>
--------
(/1/) All stock option grants are issued at market value on the date of grant.
Issued options are exercisable one year after the date of grant and have a
ten year term. Options lapse three months after the date of termination of
employment except for retirement, death or disability. For Executive
Officer named in the table and other key employees, the stock option
grants prior to October 1993 contain limited stock appreciation rights
exercisable immediately only upon the change of control of the Company
as defined on page 13 under the section Termination of Employment and
Change of Control Agreements. Options issued to Executive Officers and
certain key employees prior to June 1992 contain supplemental cash
payments (tax gross-up payments) provisions. No stock option grants
awarded subsequent to June 1992 by the Compensation Committee contain
supplemental cash payments. James E. McNulty has 12,200 options eligible
for tax gross-up. One other Executive Officer has 708 options eligible
for tax gross-up.
(/2/) No gain will be realized by an optionee without an increase in the price
of the Company's common stock which will correspondingly increase the
value of the common stock outstanding held by all stockholders. A 5
percent and a 10 percent gain would increase the total value of the
Company's outstanding common stock by $1,019.2 and $1,619.4 million
respectively. There can be no assurance that the gains shown in the
table will be realized since any gain is dependent on the performance of
the Company's common stock price which is attributed to many factors
including but not limited to Company performance and stock market
conditions. The value of the realized gains shown in this Table is
provided solely for illustrative purposes only in compliance with rules
promulgated by the Securities and Exchange Commission.
10
<PAGE>
STOCK OPTIONS EXERCISED DURING FISCAL YEAR 1995
The following table presents information regarding the exercise during fiscal
year 1995 of options held by the named Executive Officers on June 30, 1995, to
purchase shares of the Company's common stock and the value of unexercised
stock options.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-
AT FY-END END(/1/)
(#) ($)
------------- -------------
SHARES ACQUIRED VALUE(/2/) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
James R. Wilson....... 0 $ 0 85,650/0 $573,146/0
Richard L. Corbin..... 0 0 17,000/0 102,562/0
Joseph A. Lombardo.... 0 0 48,100/0 564,107/0
James E. McNulty...... 0 0 40,500/0 429,168/0
H. George Faulkner.... 0 0 17,500/0 88,218/0
</TABLE>
--------
(/1/) Value is calculated based on the closing New York Stock Exchange price of
the Company's common stock as of June 30, 1995, minus the option exercise
price.
(/2/) Value is calculated based on the average of the high and low New York
Stock Exchange price on the day on which the option was exercised minus
the option exercise price.
LONG-TERM COMPENSATION
The following Table sets forth information concerning the named Executive
Officers participating in the Company's Key Executive Long-Term Incentive Plan
for fiscal year 1995 for the three-year Plan period beginning July 1, 1994, and
ending June 30, 1997.
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-
BASED PLANS(/1/)
-------------------------
PERFORMANCES OR
OTHER PERIOD
UNTIL MATURATION $ $ $
NAME OR PAYOUT THRESHOLD TARGET MAXIMUM
---- ---------------- --------- ------- -------
<S> <C> <C> <C> <C>
James R. Wilson...................... 3 Years 90,312 361,250 722,500
Richard L. Corbin.................... 3 Years 42,000 168,000 336,000
Joseph A. Lombardo................... 3 Years 43,000 172,000 344,000
James E. McNulty..................... 3 Years 35,981 143,925 287,850
H. George Faulkner................... 3 Years 46,090 184,363 368,726
</TABLE>
--------
(/1/) Awards under the Company's Executive Long-Term Incentive Plan are based on
attainment of predetermined earnings per share goals and return on capital
for Executive Officers who are not also operating unit heads. For
Executive Officers and other key employees who are also operating unit
managers participating in the Plan, awards are based on attainment of
predetermined goals, including pretax profit and return on total
investment goals. The Plan provides that bonus payments may be paid in
cash or a combination of cash and stock. The stock is valued at market
value on the date payment is made. Estimated Future Payouts are for the
fiscal year 1995 Plan Period.
11
<PAGE>
The Plan provides a target bonus opportunity based on a percentage of each
participant's base annual compensation determined by the participant's salary
grade. The opportunity ranges from 60 percent of base annual compensation for
the lowest salary grade covered by the Plan to 100 percent of base annual
compensation for the highest salary grade covered by the Plan. The amount of
the bonus award paid will vary from 25 percent of the target bonus opportunity
being paid if the threshold bonus opportunity goals are achieved; 100 percent
of the target bonus opportunity if the target bonus goals are achieved; and a
maximum bonus of 200 percent of the target bonus opportunity if the maximum
bonus targets are achieved.
RETIREMENT PLAN
The Company maintains a defined benefit Pension Plan for non-bargaining unit
employees and funds its entire cost. The following table shows the estimated
annual benefits payable upon retirement (including amounts attributable to the
defined benefit excess plan) for the specified compensation and years of
service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
------------ -------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 58,601 $ 80,055 $101,503 $122,951 $ 144,392 $ 159,196
400,000 119,758 163,518 207,266 251,014 294,747 324,355
600,000 180,915 246,981 313,029 379,077 445,101 489,513
800,000 242,071 330,444 418,792 507,140 595,456 654,672
1,000,000 303,228 413,907 524,555 635,203 745,811 819,831
1,500,000 456,120 622,564 788,962 955,360 1,121,697 1,232,728
</TABLE>
As of June 30, 1995, the named Executive Officers had the following credit
service for determining pension benefits: James R. Wilson, 6 years; Richard L.
Corbin, 1 year; Joseph A. Lombardo, 6 years; and James E. McNulty, 6 years.
All of the Executive Officers named in the Summary Compensation Table, except
Mr. Faulkner, participate in the Plan. Pension benefits are based on the
average earnings for the highest five consecutive years of the final ten years
of service. Compensation included in the final average earnings for pension
benefit computation includes base annual salary and annual bonuses but excludes
payments from the Company's Executive Long-Term Incentive Plan and all other
annual compensation shown in the Summary Compensation Table. Unreduced pension
benefits are calculated pursuant to the Plan's benefit formula as a straight
life annuity payable at age 67. Executive Officers of the Company retire at age
65. Benefits may be payable in the form of a joint and survivor or a ten-year
certain option. Also, Messrs. Wilson, Corbin, Lombardo, and McNulty participate
in an unfunded survivors income benefit plan which provides benefits to a
surviving spouse of approximately 50 percent of a participant's base pay at
death and continues until the participant would have attained age 65.
Because the Pension Plan is subject to the benefit and compensation limits
under the Internal Revenue Code of 1986 (the "Code"), the Company has
established an unfunded Excess Benefit Plan that provides for payment of
amounts that would have been paid to employees under the pension formula absent
the benefit limitations of the Code.
12
<PAGE>
The Company also maintains a Supplemental Executive Retirement Plan ("SERP")
designed to provide unfunded supplemental retirement benefits to certain
Executive Officers and key employees of the Company. The SERP is designed to
provide such selected employees a benefit at retirement equal to 60 percent of
the participant's average five highest consecutive years of compensation during
the last ten years. Plan benefits are offset by amounts the participant
receives from the Company's Retirement Plan, Excess Benefit Plan, and any
pension benefits received from other employer plans including military
pensions. A reduced early retirement benefit is available only at the
discretion of the Chairman of the Board or President. The SERP provides
accelerated benefit accrual, vesting and payment in the event of a change of
control of the Company as defined by the Board of Directors. Messrs. Wilson,
Lombardo, Corbin and McNulty participate in the SERP.
The Company may fund and secure all or a part of the Excess Benefit Plan and
SERP benefits through the use of a "Rabbi" Trust meeting the Code requirements.
All such funding is subject to the claims of the Company's creditors.
H. George Faulkner participates in the Huck International, Inc. Personal
Retirement Account Plan ("PRA"), a cash balance plan, providing benefits based
on age and salary. Mr. Faulkner's estimated annual retirement benefit at age 65
is $35,784.60.
Mr. Faulkner also participates in the Huck International, Inc., Supplemental
Executive Retirement Plan ("SERP") which is designed to provide supplemental
benefits in addition to the PRA benefits. Mr. Faulkner's estimated annual SERP
benefits payable at age 65 is $71,882.
TERMINATION OF
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
The Company has entered into change of control employment agreements with
Messrs. Wilson, Corbin, Lombardo, McNulty and Faulkner and with certain other
key employees. These agreements are intended to provide for continuity of
employment in the event of a change of control as defined by the agreements,
including the following events: (i) acquisition by any person of 20 percent or
more of the voting securities of the Company; (ii) changes of the "incumbent
Board" as defined in the agreements; (iii) reorganization, merger or
consolidation of the Company; or (iv) liquidation or sale of the Company. Each
of the agreements requires continued employment of the executive following a
change of control on a basis equivalent to his employment immediately before
such change. In the event that during the three-year period following a change
of control, the executive terminates his employment for "good reason" (as
defined in the agreements) or for any reason during the 30-day period
commencing one year after the change of control; or the Company terminates the
executive's employment "without cause" (as defined in the agreements), the
executive would be entitled to receive a lump sum payment equal to three times
the sum of the executive's salary, average long-term bonus and highest annual
bonus plus service and earnings credits under any Company retirement plan,
which would have been earned over, and the continuance of fringe benefits
during, the three years after such termination. The agreements provide that
payments from the Company which (a) constitute "parachute payments" as defined
in Section 280G of the Code and (b) would subject the executive to the 20
percent excise tax (the "Excise Tax") contained in Section 4999 of the Code,
will be "grossed up" by an additional payment in an amount defined by the
agreements which takes into account the Excise Tax, tax penalties and interest,
as the case may be, with respect to any such "parachute payments." The amounts
of such parachute payments, pursuant to the terms described above, are only
determinable with specificity on the date such payment obligations, if any, are
triggered. With respect to the salary, annual bonuses and long-term bonuses
shown in the Summary Compensation Table, the estimated benefits payable under
the foregoing agreements for Messrs. Wilson, Corbin, Lombardo, McNulty and
Faulkner are $21.7; $6.7; $10.2; $8.5; and $11.0 million respectively.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
IN COMPENSATION PROCESS
Mr. Charles S. Locke, the retired Chairman of the Board and Chief Executive
Officer of Morton International, Inc., and Chairman of the Compensation
Committee, was Chairman of the Board and Chief Executive Officer of Morton
Thiokol, Inc. prior to the spin-off July 1, 1989, of the Company's chemical and
commercial business forming Morton International, Inc. The Company and Morton
International, Inc. are independent public corporations. No member of the
Compensation Committee participates in any of the Company's Executive
Compensation programs or employee benefit plans.
Under agreements in connection with the spin-off of the Company's commercial
businesses, the Company will provide, at fair market value, propellant-related
products and certain services to Morton International's manufacturing facility
which adjoins a Company facility in Promontory, Utah. In addition, Morton
International continues to supply specialty chemical polymers, for use as
rocket motor liners, to the Company on arm's-length terms. During fiscal year
1995, the Company purchased $1.5 million in polymer specialty chemicals from
Morton and Morton purchased from the Company $1.1 million in services and
propellant related products.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Policy
The Committee's Compensation Policy is designed to provide a competitive
compensation program which will attract, retain, motivate and reward talented
individuals as Executive Officers and as key employees of the Company. The
compensation program is administered by the Committee. The Committee's policies
are implemented by the Company's compensation and benefits staff under the
direction of the Executive Vice President of Human Resources and
Administration. The components of the program include base annual salary, short
and long-term incentives, benefits and perquisites. Compensation grades, ranges
and midpoints adopted by the Committee are set based upon nationally recognized
compensation databases: (i) the Hewitt Management Compensation Survey 777
consisting of 339 companies; (ii) Towers Perrin Compensation Data Bank
consisting of 393 companies; and (iii) the Summit (AIA) survey of 62 aerospace
companies. Although there are many other companies represented in these
compensation surveys, the Committee also considers the compensation of peer
group companies contained in the S&P Aerospace/Defense Index. Base salaries are
set to correspond approximately with the mean of salaries offered for like
positions by comparable companies in the compensation surveys. Short and long-
term incentives are designed to provide above average total compensation when
performance of the Company or an operating unit is above targets set by the
Committee. Annual incentives are related to the Company and operating unit
performance and an individual's achievement of qualitative strategic goals.
Long-term incentives are designed to balance executive management focus between
short and long-term goals and to provide capital accumulation linked to Company
or operating unit performance. The total compensation program is designed to
reflect the overall level of the Company's or operating unit's financial
performance and achievement of strategic goals. Total compensation will vary
from year to year depending on the actual performance achieved against the
predetermined goals set both financially and qualitatively. The Committee deems
that specific financial goals, including earnings per share and return on
investment and specific subjectively measured qualitative goals, are
proprietary and confidential information, the disclosure of which would reveal
future strategies and plans of the Company not otherwise disclosed.
14
<PAGE>
During fiscal year 1995, the Committee completed its annual review of the
compensation programs to determine the continuing effectiveness of the major
compensation components. As a result of such review, the Committee determined
that no changes in the program designs are required at this time.
For the compensation program's financial incentives, the Committee also
reviewed the impact of the charges to earnings taken by the Company in the
third quarter of fiscal year 1995 for restructuring the Company's defense
operations and launch vehicle division. The Committee also reviewed the impact
of the charges taken in the prior periods for recognition of the accounting
charges required in recognition of post-retirement medical and post-employment
benefit costs under "Employer's Accounting for Post-Employment Benefits" SFAS
112 and SFAS 106 "Employer's Accounting for Post-Retirement Benefits other than
Pensions." The Committee concluded that in the best interests of the Company
and the incentive plan participants, the impact of these charges would be
excluded for measuring the level of achievement of the financial performance
results against the financial goals previously established by the Committee for
both the annual and long-term incentive plans. The Committee concluded that by
excluding such charges, the impact on the compensation plans for the current
and subsequent fiscal years would be minimized.
The Committee also reviewed the impact of the Company's federal income tax
refund and determined that it was in the best interest of the Company and plan
participants that such refund amounts be excluded from the measurement of the
achievement of the financial results for the annual incentive plans. The
Committee determined, however, that the federal income tax refund would be
included in the measurement of the achievement of the financial results against
the financial goals set by the Committee for the Executive Long-Term Incentive
Plan. Such recognition reflects the successful efforts of the participants in
the program in achieving the refund over a period of several years.
The principal elements of the compensation program administered by the
Committee under the Compensation Policy for the Chief Executive Officer, the
Executive Officers, including the Chief Executive Officer, and other key
employees are as follows:
Base Annual Salary
Base annual salaries are set against established salary grades reflecting the
position, duties and level of responsibilities of each Executive Officer,
including the Chief Executive Officer, and each other key employee. For each
salary grade, a salary range has been established consisting of maximum and
minimum levels evenly distributed around a midpoint based on the compensation
survey data discussed above. Base annual salaries are reviewed annually and
adjusted within the established salary ranges for each salary grade to reflect
individual performance and profitability of the Company or operating unit.
Periodically, salary grades, compensation ranges and midpoints are reviewed and
adjusted so as to remain competitive with the marketplace as determined from
the compensation databases.
Annual Bonus Program
The Key Executive Bonus Plan established by the Committee, and approved by
the Board, as an annual incentive compensation plan provides cash incentive
opportunities to Executive Officers and other key employees selected by the
Committee. Each bonus amount is based upon the Company or respective operating
unit achieving predetermined earnings goals and the attainment of individual
qualitative strategic goals relative to the participant's position, duties and
responsibilities with the Company ("Target Bonus Goals"). The Board of
Directors sets the Company's earnings goals effective
15
<PAGE>
the beginning of the fiscal year. With review and approval by the Compensation
Committee, the Chief Executive Officer sets the earnings and strategic goals
for operating unit participants.
The Target Bonus Opportunity set for each Plan participant is a percentage of
the participant's base annual compensation. The percentage is determined by the
participant's salary grade and ranges from 30 percent of base annual
compensation for the lowest salary grade covered by the Plan, to 60 percent of
base annual compensation for the highest salary grade.
The amount of each actual cash bonus paid is based on the Company's or
operating unit's earnings performance compared to predetermined earnings goals
and the level of attainment of strategic goals. Strategic goals will vary for
each Executive Officer depending on position and responsibility. Fiscal Year
1995 strategic goals included development and implementation of a restructuring
plan for the reorganization of the strategic and defense operations into a new
operating division, Defense and Launch Vehicles Division, completion of the
planned acquisition, achievement of sales and marketing plans, new product
development, customer satisfaction, quality, cost reduction and safety and
environmental management. The cash bonus percentages range from: (i) 0 percent
of the Target Bonus if Target Bonus Goals are not met; (ii) 40 percent to 100
percent of the Target Bonus if Target Bonus Goals are partially or fully
achieved (at least 95 percent of the Target Bonus Goals must be achieved); and
(iii) up to a maximum of 200 percent of the Target Bonus depending on the level
by which Target Bonus Goals are exceeded by actual performance results. The
amount of the annual bonus paid on achievement of the subjectively measured
qualitative goals will range from 1 percent to 25 percent of the Target Bonus
Opportunity. The amount of the annual bonus paid on achievement of the earnings
goal will range from a threshold of 25 percent of the Target Bonus Opportunity
to a maximum of 200 percent of the Target Bonus Opportunity which is also the
maximum bonus payable under the Plan. If, for example, the earnings goal is
achieved and all the qualitative goals are met, a bonus payment will be made of
125 percent of the Target Bonus Opportunity: 100 percent representing the
achievement of the earnings goal and 25 percent representing achievement of the
qualitative goals.
The Plan also permits the Committee to designate employees including
Executive Officers as Special Participants to receive discretionary bonus
payments made by the Committee in recognition of outstanding achievements or
accomplishments. No named Executive Officer received such a discretionary bonus
during fiscal year 1995.
Annual bonuses accrued for fiscal year 1995 reflect actual earnings as
adjusted in the manner previously described which exceeded earnings goals set
at the beginning of the fiscal year as an incentive to manage the Company and
operating units profitably in an environment of reduced federal expenditures
for defense and aerospace procurement. Bonus payments also reflect the
attainment level of individual qualitative strategic goals against
predetermined criteria as reviewed and approved by the Committee. All Executive
Officers named in the Summary Compensation Table earned bonuses from the Plan.
Long-Term Incentive Plan
The Key Executive Long-Term Incentive Plan adopted by the Committee, and
approved by the Board, is designed as a long-term incentive program for
Executive Officers and other key employees in a position to substantially
influence the performance of the Company. The Plan authorizes incentive bonuses
based on achievement over a three-year period of specific financial goals
predetermined by the Committee for the Company and its operating units. The
financial goals are based on earnings per
16
<PAGE>
share growth and return on total capital of the Company for each three-year
period. For each operating unit manager of the Company, the financial goals are
growth in operating profits and return on total investment at that unit.
The Target Incentive Bonus opportunity is a percentage of each participant's
base annual compensation determined by the participant's salary grade. Targets
range from 60 percent of base annual compensation for the lowest salary grade
covered by the Plan to 100 percent of base annual compensation for the highest
salary grade. The amount of the long term incentive bonus payment is formula
based and is equal to 50 percent of the Target Bonus Opportunity being awarded
on the achievement of earnings per share goals and 50 percent on the
achievement of return on capital or investment goals, as the case may be,
depending if the employee is a corporate or operating unit participant. The
Plan provides that the after tax payment of the bonus award is a combination of
cash and common stock of the Company. The Committee has determined that the
awards beginning with the fiscal year 1994 payment will be made in a
combination of cash and stock reflecting the Committee's commitment to
encourage ownership of Company stock by Executive Officers and key employees
participating in the Plan.
Upon completion of a three-year performance period, the bonus paid to a
participant, subject to approval by the Committee, is based on the financial
goals achieved by the Company or operating unit, as the case may be, in
relationship to the financial goals set by the Committee at the beginning of
the Plan period. Actual performance, which varies from these goals, results in
individual awards that range from 0 percent to 200 percent of Target Incentive
Bonus Opportunity. For the three-year Plan period ending June 30, 1995, the
Company's financial performance (measured in terms of earnings per share and
return on capital or investment) exceeded the goals set at the beginning of the
Plan period commencing July 1, 1992. Messrs. Wilson, Lombardo, and McNulty have
earned bonuses from the Plan. Richard L. Corbin will be eligible for a bonus
payment, if earned, for the plan period ending June 30, 1997.
Stock Options
Under the Company's 1989 Stock Awards Plan approved by shareholders, the
Committee is authorized to grant stock options, stock appreciation rights,
shares of restricted stock and other stock awards. The number of shares granted
to an individual is based on Committee established guidelines relating to the
recipient's position, salary grade and stock price. The calculation of the
shares in an award is determined in part by dividing the midpoint of an
individual's salary range by the Company's stock price. An individual's past
performance in meeting strategic goals and the number of shares granted in
prior awards may also be considered by the Committee in its discretion in
determining the number of shares in the grant to be awarded. Stock options
granted by the Committee in August 1994 reflect the results of the Committee's
review of its stock option policy. The Committee has determined that providing
stock based compensation awards to Executive Officers and other key employees
who are in a position to impact the future performance of the Company continues
to be an integral part of the compensation package at this time given industry
practice. The Committee has reduced the number of participants in the plan who
are not Executive Officers or other key employees in a position to impact the
long term financial success of the Company and the aggregate number of options
granted compared to prior years.
17
<PAGE>
Perquisites
The Committee reviews annually the Executive Officers', including the Chief
Executive Officer's, perquisites to determine if they are competitive and
reflect the usual and customary industry practices based on compensation survey
data.
Determination of the Chief Executive Officer's Compensation
The fiscal year 1995 compensation for Mr. James R. Wilson, President and
Chief Executive Officer, consists of a base annual salary, an annual bonus,
long term incentive bonus, stock option grant, employee benefits provided to
salaried employees as a group, and perquisites that are usual and customary for
the position.
The Committee has determined Mr. Wilson's salary grade, salary range, and
midpoint based on his position as President and Chief Executive Officer using
the salary data described above. The size of the Company, the aerospace,
defense, fastening systems industries and the markets the Company serves were
considered by the Committee in setting Mr. Wilson's salary level for fiscal
year 1995. Mr. Wilson's base annual salary was correspondingly increased from
$425,000 to $500,000 effective October 1, 1995, as the result of such review.
Mr. Wilson's new base annual salary, with a Compa ratio of 99.6 (base
compensation in relationship to the midpoint of the salary range to the
corresponding salary grade), effectively provides Mr. Wilson with compensation
that falls within the range of salaries for comparable salary grades based on
the salary survey data and reflects the Committee's continuing policy of
providing a competitive compensation program.
Pursuant to the terms of the Key Executive Bonus Plan, Mr. Wilson's target
bonus opportunity is set at 55 percent of his base annual compensation with a
threshold bonus opportunity of 40 percent of target bonus and a maximum bonus
opportunity of 200 percent of target bonus. Under the terms of the Key
Executive Long-Term Incentive Bonus Plan for the three-year plan beginning July
1, 1995 and ending June 30, 1998, Mr. Wilson's target bonus opportunity was set
at 100 percent of base annual compensation at July 1, 1995. The threshold bonus
opportunity under this long-term incentive plan is 25 percent of target bonus
opportunity and the maximum bonus opportunity is 200 percent of target.
For fiscal year 1995, Mr. Wilson received an annual bonus award of $467,500
or 200 percent of his Target Bonus Opportunity (the maximum bonus that can be
awarded under the Plan). Pursuant to the terms of the Key Executive Bonus Plan,
200 percent represents achievement of the earnings per share goals, and 25
percent represents the subjectively measured qualitative goals. Both the
financial and qualitative goals were set at the beginning of the fiscal year.
For fiscal year 1995, Mr. Wilson's qualitative bonus goals included his
successful completion of an acquisition and other strategic and financially
related plans.
Mr. Wilson's Key Executive Long-Term Incentive Plan bonus plan payment of
$266,030 represents the achievement of actual financial results consisting of
earnings per share and return on capital to financial goals exceeding the
target goals established at the beginning of the three year plan period
beginning July 1, 1992. This bonus payment is paid 50 percent in cash and 50
percent in Company common stock based on the market price of the date of the
award.
Mr. Wilson's compensation and the compensation of the other named Executive
Officers in the Summary Compensation Table reflect the financial performance of
the Company in an environment of continuing reductions in federal spending on
defense and aerospace programs. Since the beginning of
18
<PAGE>
the five year performance period beginning July 1, 1990, and ending June 30,
1995, total shareholder value including the assumed reinvestment of dividends,
has increased approximately 294 percent compared to the industry average of 214
percent. During the fiscal year 1995, earnings per share were maintained on a
declining sales base and on lower volumes at Company operations serving
defense-related markets. The fastening systems segment continued its growth by
strong performance in the industrial fastener segment of the business and
improving aerospace fastener markets for the year. The completion of a planned
asset acquisition during the year further broadens the industrial fastener
product line. The Space Shuttle contract continues to be well managed in terms
of motor performance, delivery and cost management. The recognition of the
restructuring charge recorded by the Company in the third quarter reflects the
reorganization of the Company's defense and non-Shuttle related Space
Operations to improve the competitive position of the Company in these markets
on lower volumes and to improve profitability and cash flows. The balance sheet
was strengthened by the retirement of long-term debt providing the Company with
financial flexibility. The completion of a significant tax audit and
corresponding refund with favorable earnings and cash flow was achieved.
1993 TAX ACT COMPENSATION LIMITS
Section 162(m) of the Code adopted under the 1993 tax law changes, restricts
the tax deductibility for certain non-formula performance based executive
compensation exceeding $1 million. Mr. Wilson's compensation exceeds the $1
million compensation limit for fiscal year 1995. To the extent that such
compensation in excess of the $1 million dollar limit does not meet the
performance base compensation requirements, the Company may not receive the
benefit of a corresponding tax deduction. The Committee has determined that
applying discretion in determining all or part of the criteria for Mr. Wilson's
incentive compensation awards for fiscal year 1995 outweighs the tax benefit of
the corresponding tax deduction that might otherwise have been received for
such compensation meeting Internal Revenue Code requirements. During the 1996
fiscal year the Committee with the advice of counsel will review the Company's
compensation plans and determine which of the plans may need to be amended to
comply with the Internal Revenue Service's requirements for performance base
compensation established under the 1993 Tax Act. Such changes, if any, and to
the extent they require stockholder approval, will be presented to stockholders
at a future annual meeting.
COMPENSATION COMMITTEE
Charles S. Locke, Chairman
James R. Burnett
Edsel D. Dunford
L. Dennis Kozlowski
James M. Ringler
The report of the Compensation Committee and the following stock performance
graph are not deemed to be "soliciting material" or to be "filed" with the SEC
or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), except to the
extent the Company specifically requests that such information be treated as
soliciting material or specifically incorporates it by reference into any
filing under the Securities Act of 1933, as amended, or the Exchange Act.
19
<PAGE>
PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative stockholder
return reflected by dollars on the common stock of the Company for the five
year period beginning July 1, 1990, and ending June 30, 1995, as measured
against (i) the Standard & Poor's 500 Stock Index; and (ii) the Standard &
Poor's Aerospace and Defense Index.
The returns shown assume that $100 was invested in Thiokol Corporation common
stock starting on July 1, 1990. The returns shown also assume that all
dividends paid during the five year period were reinvested.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
6/90 6/91 6/92 6/93 6/94 6/95
------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Thiokol Corporation................. $100.00 133.17 143.85 201.79 228.59 293.86
Standard & Poor's 500 Index......... $100.00 107.40 121.79 138.39 140.34 176.93
Standard & Poor's Aerospace/Defense
Index.............................. $100.00 98.30 99.64 129.07 154.31 213.90
</TABLE>
20
<PAGE>
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation by the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP ("Ernst & Young") as its independent auditors for
the fiscal year ending June 30, 1996. At the Board's direction, the appointment
of Ernst & Young is being presented to the stockholders for ratification at the
1995 meeting. While ratification is not required by law or the Company's
Certificate of Incorporation or By-Laws, the Board believes that such
ratification is desirable. In the event this appointment is not ratified by
stockholders, the Board will consider that fact when it appoints independent
auditors for the next fiscal year.
Ernst & Young was the Company's independent auditors for fiscal year 1995 and
for all prior years since 1969. Audit services provided to the Company by Ernst
& Young during fiscal year 1995 consisted of examination of the financial
statements of the Company and its subsidiaries for that year and the
preparation of various related reports, as well as services relating to filings
with the Securities and Exchange Commission, and pension and savings plan
audits.
Representatives of Ernst & Young are expected to be present at the 1995
meeting with the opportunity to make a statement if they so desire and to be
available to respond to appropriate questions relating to that firm's
examination of the Company's financial statements for fiscal year 1995.
The Board of Directors recommends a vote FOR the proposal to ratify the
appointment of Ernst & Young.
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Management does not now intend to bring before the 1995 Annual Meeting any
matters other than those disclosed in the notice of the meeting. Should any
matter requiring a vote of stockholders be properly brought before the meeting
by or at the direction of the Board of Directors, the proxies in the enclosed
form confer upon the person or persons entitled to vote the shares represented
by such proxies discretionary authority to vote such shares in respect of any
such matter in accordance with their best judgment.
For business to be properly brought before an annual stockholders' meeting by
a stockholder, advance written notice in accordance with the By-Laws of the
Company must be received by the Corporate Secretary of the Company at its
principal executive offices.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholder proposals intended for the proxy statement for the 1996 Annual
Stockholders' Meeting must be received by the Corporate Secretary of the
Company at its principal executive offices no later than May 24, 1996.
21
<PAGE>
ANNUAL REPORT AND FORM 10-K
The Company will provide, without charge, upon written request from any
person solicited herein, a copy of the Thiokol Corporation Annual Report and
Form 10-K filed with the Securities and Exchange Commission. Requests should be
directed to the Director of Investor Relations, Thiokol Corporation, 2475
Washington Blvd., Ogden, Utah 84401-2398.
By Order of the Board of Directors,
Edwin M. North
Secretary
Ogden, Utah
September 22, 1995
22
<PAGE>
THIOKOL CORPORATION PROXY/VOTING INSTRUCTION CARD
Ogden, Utah
---------------------------------------------------------------------------
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
R MEETING ON OCTOBER 26, 1995.
O The undersigned hereby appoints U. EDWIN GARRISON, CHARLES S. LOCKE, and
JAMES R. WILSON, or any of them, each with power of substitution, as
X proxies to vote as specified on this card all shares of common stock of
Thiokol Corporation (the "Company") owned of record by the undersigned on
Y August 22, 1995, at the Company's Annual Meeting of Stockholders on October
26, 1995, and at any adjournment thereof. Said proxies are authorized to
vote in their discretion as to any other business which may properly come
before the meeting. IF A VOTE IS NOT SPECIFIED, SAID PROXIES WILL VOTE FOR
PROPOSALS 1 AND 2.
Receipt is acknowledged of the Company's Annual Report to Stockholders for
the fiscal year-ended June 30, 1995, and notice and Proxy Statement for the
above Annual Meeting.
Nominees for Election as Directors to the Class of Directors whose term
expires with the 1998 Annual Meeting of Stockholders of the Company: EDSEL
D. DUNFORD, U. EDWIN GARRISON and JAMES R. WILSON.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
This card also constitutes voting instructions for Company shares held in
its Employee Savings and Investment Plan.
<PAGE>
[X] PLEASE MARK YOUR ++ + 5262
VOTES AS IN THIS + +
EXAMPLE. + ++++++
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of
Directors. (see [_] [_]
reverse side)
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on line provided below:
-----------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify appointment of Ernst & Young [_] [_] [_]
LLP as independent auditors for fiscal year 1996.
--------------------------------------------------------------------------------
NOTE: Please date and sign as name appears hereon. If shares are
held jointly or by two or more persons, each stockholder
named should sign. Executors, administrators, trustees,
etc. should so indicate when signing. If the signer is a
corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in
partnership name by authorized person.
SIGNATURE(S)______________________________________________________
__________________________________________________________________
DATE ______________,1995
<PAGE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
THIOKOL CORPORATION
FORM 10-Q
QUARTERLY REPORTS
Thiokol Corporation's quarterly financial information is available
on Form 10-Q filed with the Securities and Exchange Commission.
If you would like to be added to Thiokol's annual mailing list for
this year to receive a copy of Form 10-Q, please complete the
following information:
----------------------------------------------------------
Name
----------------------------------------------------------
Title
----------------------------------------------------------
Street Address or P.O. Box Number Suite or Apt. Number
----------------------------------------------------------
City State Zip Code
RETURN TO: DIRECTOR OF INVESTOR RELATIONS
THIOKOL CORPORATION
2475 WASHINGTON BLVD., M/S A44
OGDEN, UTAH 84401-2398
<PAGE>
THIOKOL CORPORATION PROXY/VOTING INSTRUCTION CARD
Ogden, Utah
---------------------------------------------------------------------------
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
R MEETING ON OCTOBER 26, 1995.
O The undersigned hereby appoints U. EDWIN GARRISON, CHARLES S. LOCKE and
JAMES R. WILSON, or any of them, each with power of substitution, as
X proxies to vote as specified on this card all shares of common stock of
Thiokol Corporation (the "Company") owned of record by the undersigned on
Y August 22, 1995, at the Company's Annual Meeting of Stockholders on October
26, 1995, and at any adjournment thereof. Said proxies are authorized to
vote in their discretion as to any other business which may properly come
before the meeting. IF A VOTE IS NOT SPECIFIED, SAID PROXIES WILL VOTE FOR
PROPOSALS 1 AND 2.
Receipt is acknowledged of the Company's Annual Report to Stockholders for
the fiscal year-ended June 30, 1995, and notice and Proxy Statement for the
above Annual Meeting.
Nominees for Election as Directors to the Class of Directors whose term
expires with the 1998 Annual Meeting of Stockholders of the Company: EDSEL
D. DUNFORD, U. EDWIN GARRISON and JAMES R. WILSON.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
This card also constitutes voting instructions for Company shares held in
its Employee Savings and Investment Plan.
<PAGE>
[X] PLEASE MARK YOUR ++ + 8898
VOTES AS IN THIS + +
EXAMPLE. + ++++++
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of
Directors. (see [_] [_]
reverse side)
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on line provided below:
-----------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify appointment of Ernst & Young [_] [_] [_]
LLP as independent auditors for fiscal year 1996.
--------------------------------------------------------------------------------
NOTE: Please date and sign as name appears hereon. If shares are
held jointly or by two or more persons, each stockholder
named should sign. Executors, administrators, trustees,
etc. should so indicate when signing. If the signer is a
corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in
partnership name by authorized person.
SIGNATURE(S)______________________________________________________
__________________________________________________________________
DATE ______________,1995
<PAGE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
THIOKOL CORPORATION
FORM 10-Q
QUARTERLY REPORTS
Thiokol Corporation's quarterly financial information is available
on Form 10-Q filed with the Securities and Exchange Commission.
If you would like to be added to Thiokol's annual mailing list for
this year to receive a copy of Form 10-Q, please complete the
following information:
----------------------------------------------------------
Name
----------------------------------------------------------
Title
----------------------------------------------------------
Street Address or P.O. Box Number Suite or Apt. Number
----------------------------------------------------------
City State Zip Code
RETURN TO: DIRECTOR OF INVESTOR RELATIONS
THIOKOL CORPORATION
2475 WASHINGTON BLVD., M/S A44
OGDEN, UTAH 84401-2398
